China loosened monetary policy last quarter at the fastest rate in nearly two years as new credit was shown to have a weakening effect on economic growth, Bloomberg reported, citing Bloomberg’s China Monetary Conditions Index. The central bank on August 8 announced a RMB12 billion (US$1.9 billion) quota for re-discounted loans to spur credit to small businesses and agriculture, building on previous moves to support the sectors. “The government is generally trying to walk a fine line between loosening credit enough to get the economy going, but not to allow there to be another credit boom,” said Stephen Green, chief China economist at Standard Chartered.
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